Tess can deal with Austrian German no problem at all, of course, having published translations by Peter Handke, Julya Rabinowich, Alois Hotschnig and others. You can read an interview she gave me in 2011 here, in which she had the following to say about Austrian writing in particular:
Austria is a gorgeous country, highly civilized and gemütlich, but you don’t need to scratch the surface very deeply to find some very dark undercurrents. I find it refreshing to read Austrian writers who engage with the ambiguities and unsavoriness under their culture’s veneer. The knee-jerk reaction, of course, is to accuse them of Nestbeschmützen, but the best and most nuanced Austrian writers willing to explore these less fortunate aspects of their culture and their history do so out of a very sincere, if sometimes disappointed, love for their country.Tess picks up the prize on 24 March in New York, and the author will also be attending. I'm really pleased she's won this honour and I hope the award helps her to find a publisher for this unusual and beautifully written book.
Austrian-German is to me more playful and, as you note, more elegant than German-German. Of course you can find plenty of Austrian and German writers who disprove my theory. But in my experience as a translator Austrian-German wears its irony more lightly and its humour is subtler and more biting.